The U.S. Securities and Exchange Commission has taken its first enforcement action against a cryptocurrency exchange, resolving allegations against the founder of a digital trading platform accused of failing to register his company with the agency.

Zachary Coburn’s EtherDelta marketplace executed more than 3.6 million orders for certain tokens without registering as a an exchange, the SEC said in a statement Thursday. Without admitting or denying the findings, he agreed to pay a US$75,000 fine as well as US$313,000 in disgorgement and interest. Coburn’s cooperation helped him win a lower fine, the SEC said.

Key Details

Over an 18-month period, EtherDelta sold ERC20 tokens, a type of blockchain-based token commonly issued in initial coin offerings. 

Almost all of the orders were traded after a July 2017 SEC report stating that certain digital assets, such as DAO tokens, are securities and that platforms that offered trading of them would be under the SEC’s jurisdiction. 

“We are pleased with the result,” attorneys for Coburn said in an email. “Our client appreciates being able to get this behind him.” 

The SEC has warned investors about the risks of investing in initial coin offerings in recent years. 

SEC Chairman Jay Clayton has said that the market is probably full of fraud.